Peace Trade. As John Lennon once mused, “War is over, if you want it.” The market is taking those lyrics to heart, with stocks pushing toward fresh highs and fear all but forgotten.

The S&P 500 closed up 0.8% to its fifth record of 2026. The Nasdaq Composite also closed at a record, up 1.6% for its best 11-day stretch since March 2022

The Dow Jones Industrial Average was the odd index out, losing 72 points, or 0.1%.

“Once again, stocks are basically expressing their view that the war in the Persian Gulf is all but over,” writes Interactive Brokers Chief Strategist Steve Sosnick.

Ultimately, it’s a momentum-based rally, Sosnick adds. “Price action, not the underlying justification for those prices, is all that’s important.”

To be sure, there are justifications for the enthusiasm. For now, the cease-fire is holding, both sides have seemingly avoided worst-case scenarios, and markets looked oversold before their recent upturn. Even private-credit worries are declining. Meanwhile, earnings reports have provided a lift, as both Bank of America and Morgan Stanley topped estimates, with the former offering an upbeat take on the resiliency of the economy.

Earnings season could remain a good distraction. The so-called ‘guidance gap’ has turned positive, notes Talley Leger, chief market strategist at The Wealth Consulting Group. He writes that “54% of companies are raising guidance, above five- and 10-year averages, and the strongest trend since 2021.”

Investors should still take care not to get ahead of themselves given the “fragile” state of the cease-fire, as Macquarie analysts put it. And there are worries on the home front as well, from President Donald Trump once again threatening to fire Federal Reserve Chairman Jerome Powell to elevated gas prices to continued uncertainty around tariffs.

“The combination of heightened economic and geopolitical uncertainty feels unprecedented to us, and we have been observing the markets for over three decades,” wrote a team of fund managers from Osterweis on Wednesday, justifying their decision to remain defensive.

Some investors are betting that unprecedented doesn’t mean unprofitable.

The Hot Stock: Robinhood Markets +10.4%
The Biggest Loser: Carrier Global -9.5%

Best Sector: Information Technology +2.1%
Worst Sector: Materials -1.3%

Netflix kicks off tech earnings on Thursday, and the sector is going into reporting season in high spirits, as evidenced by Wednesday’s trading.

But many of the concerns hanging over tech haven’t gone away. In short, artificial intelligence programs are getting good enough that they’re not only a threat to individual workers but whole knowledge-based industries, or so the bear case goes. And yet the money they bring is just a drop in the bucket compared with the enormous investments they require. Even before the Iran War began, the Nasdaq had fallen 4.5% from its October 2025 highs.

It’s made up that ground by now, but earnings season will remain a test, as my colleague Angela Palumbo writes. Investors have uneasily adjusted to a new normal, where companies that used to be some of the world’s biggest and most reliable free cash-flow generators now don’t have a lot of cash to spare. Angela writes:

Or they could give fresh fuel to old worries.

Tomorrow features a busy slate of earnings from Abbott Laboratories, Alcoa, Bank of New York Mellon, Charles Schwab, Citizens Financial Group, KeyCorp, Marsh & McLennan, Netflix, PepsiCo, Prologis, Taiwan Semiconductor Manufacturing, Travelers, and U.S. Bancorp.

• Mastercard and 16 More Stocks for a Market Rally

• Tesla Has Some Robot Competition

• Allbirds Pivots to AI. The Stock Flies 400%

• Disney and Comcast Are Locked in a Theme-Park Battle. Here’s Who’s Winning

• Fed’s Hammack Prioritizing ‘Persistently’ High Inflation. She Says Consumers Are Struggling.

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